Newspapers’ Online Growth Weakens as Print Revenue Plummets

The Newspaper Association of America just reported the industry’s biggest-ever quarterly drop in total year-over-year revenue. Among the bad news is the steepest decline in print classifieds seen in decades, creating a fierce need for online ad revenues to grow rapidly to offset print losses. Instead, those revenues have gone from double-digit growth rates to single-digit trickles.

Total online ad revenues for newspapers in the first quarter of 2008 reached $804 million, according to the NAA, representing a 7.2 percent boost over Q1 2007’s $750 million. That’s a considerable slow-down from the year-ago period’s 22 percent growth rate.

Indeed, newspapers’ online ad revenue appears to be growing slower than the Web ad industry at large. TNS Media Intelligence reported online display ad spending growth decreased from about 16 percent in Q1 2007 to 8.5 percent this year. Nielsen also reports a dip in online search and display advertising from about 32 percent growth in Q1 2007 to around 15 percent in the same period this year.

Total print and online ad spending was down nearly 13 percent to $9.2 billion in Q1 2008, from $10.6 billion in the first quarter 2007, according to the NAA.

“With online advertising now accounting for nearly nine percent of total newspaper advertising revenue, the industry is mobilizing to meet the needs of our newest customers by making the process of purchasing advertising across multiple platforms as simple and straightforward as possible,” NAA president and CEO John Sturm said in a statement provided to ClickZ News.

The newspaper industry hopes relationships with Yahoo and a recent newspaper ad network venture pushes more online ad dollars its way, particularly from national advertisers. However, those Web projects remain in their nascent stages as paper publishers struggle. The McClatchy Co., which is a member of both the Yahoo newspaper consortium and the new quadrantOne network, announced today it will reduce its staff by 10 percent to adjust to the weakened advertising environment.

The NAA also reports national print advertising fell 9.5 percent in Q1, while retail ad spending dropped 8.6 percent. Print classifieds experienced their highest recorded rate of reduction in decades, down 25 percent from $3.4 billion in Q1 ’07 to $2.5 billion in Q1 ’08.

According to the NAA, the group is “moving away” from releasing quarterly advertising revenue reports.

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